What do letting agents do?

Whether you rent out one or several properties, staying up to date with all your landlord responsibilities can be tricky, especially if you’re juggling it alongside a day job.

The good news is that hiring a letting agent can help ease the burden, but what exactly do they do, and is it worth sacrificing rent in exchange for their services?

What is a letting agent responsible for?

Letting agents provide a range of services but one of their main roles is to help landlords comply with their legal responsibilities and understand relevant housing regulations.

While ultimate responsibility lies with you (the landlord) in the eyes of the law, your letting agent should be able to guide you and offer any advice you need.

Most letting agents will give you a choice of service packages. Depending on your circumstances, they may also be able to offer you a more bespoke service.

Typically, letting agents will offer:

Tenant search

This is usually the minimum level of service available. It generally includes arranging photographs of your property, detailing a floorplan, and carrying out appropriate advertising and marketing based on your target audience. This service also usually includes all the initial arrangements once a tenant has been found. For example, carrying our Right-to-Rent checks, issuing a legally binding tenancy agreement and ensuring the deposit is secured in an approved tenancy deposit scheme.

In most cases, tenants will also arrange to meet the agent on the agreed move-in date to hand over keys and inventory (or check-in report). When the tenant has moved, it’s then down to the landlord to manage the day-to-day management of the property and liaise with the tenant if any issues occur.

Rent collection

In addition to the tenant finding service, letting agents will also collect rent and deal with any late payments.

The landlord still remains responsible for all other aspects of maintenance.

Full management

This is the most comprehensive package on offer where the letting agent manages the overall running of the property. This includes the tenant search, rent collection, as well as overseeing everyday maintenance, arranging repairs, safety checks and carrying out inspections.

How much does it cost to use a letting agent?

Fees are set by the letting agent themselves so they can vary depending on the level of service you choose, where you are in the country and how competitive the local rental market is.

Broadly, the tenant finding service is charged as a one-off fee, normally equivalent to one month’s rent. Rent collection and fully managed services are usually taken as a percentage of monthly rent and can range from 5% to as much as 20%.

Is it worth using a letting agent?

Letting agents can help you navigate the complexity of being a landlord. Depending on the service you choose, a letting agent can also take away much of the burden and day-to-day admin that comes with owning a rental property. This can be particularly beneficial if your rental is far from where you live or you have a job and being a landlord is an extra income stream.

Experienced letting agents can also be a valuable source of knowledge, particularly when it comes to your legal obligations. Good agents should stay up to date with any changes in the law and be able to help you explore your options if you need to issue eviction notices.

However, on the other hand, hiring a letting agent can be expensive – particularly if you opt for a fully managed service. Moreover, not all letting agents are effective and you’re likely to find service and communication varies considerably depending on experience.

To give you an idea of what to consider, here’s a summary of the pros and cons:

Pros of hiring a letting agent

  • Can manage distant properties on your behalf
  • Saves you time
  • Agents usually have access to a wider pool of tradespeople for faster repairs
  • Removes the day-to-day stress and worry of managing property

Cons of hiring a letting agent

  • Can be expensive depending on the services you choose
  • Maintenance and work to the property may not meet your own standards
  • Finding an effective letting agent can be difficult depending on what you’re looking for
  • Differing expectations about how much rent to charge or the type of tenants that are suitable

What should I consider when hiring a letting agent?

As with any working relationship, you’ll get the best results if you and your letting agent are clear about the outcomes you want. For example, a letting agent may be more focussed on simply getting the property rented out, but you may have a specific tenant type in mind (such as a professional couple or professional single person).

With that in mind, questions to ask any potential letting agent and areas to discuss include:

  • How the property will be marketed – what platforms will be used, online only or a combination of online and physical marketing such as local property pages.
  • Who is the property aimed at – based on the area or property, this could make it more suitable for families, students or professionals.
  • What checks are carried out – letting agents should be aware of the minimum legal requirements (such as Right-to-Rent) but do they carry out any additional checks?
  • What is the process if a tenant falls behind with their rent – experienced letting agents will have come across tenants who miss rental payments, and should have a clear strategy to ensure any defaults are managed swiftly and effectively.
  • How often do safety checks or inspections take place – in addition to annual safety checks (such as gas), ask if the letting agent carries out inspections and inventory checks and if so, how often.

What happens if I have a complaint about my letting agent?

If you have a complaint about your letting agent, you should raise the issue with them directly.

If you can’t find a resolution, you can take the dispute to an ombudsman. By law, all property and letting agents must belong to one of two government-approved schemes:

These are redress schemes that aim to resolve the problem objectively without the need to go to court. But if you don’t agree with the ombudsman decision, you can still pursue the issue in court.

If your agent is not part of a government approved scheme, they can be fined up to £5,000. If this is the case, you should let your local council know, they’ll investigate and issue penalties as necessary.

Understanding your landlord obligations

Laws and regulations around renting property are constantly evolving to ensure minimum standards and safe homes. But for landlords, it can be time-consuming and daunting.

While hiring a letting agent is worth considering in some circumstances, it might not be the solution for you.

To help you get a better understanding of your role as a landlord, we’ve put together these insightful guides which outline the essentials so you can keep risks and financial losses to a minimum.